From the Magazine

Exclusive: How Elizabeth Holmes’s House of Cards Came Tumbling Down

In a searing investigation into the once lauded biotech start-up Theranos, Nick Bilton discovers that its precocious founder defied medical experts—even her own chief scientist—about the veracity of its now discredited blood-testing technology. She built a corporation based on secrecy in the hope that she could still pull it off. Then, it all fell apart.

The War Room

It was late morning on Friday, October 16, when Elizabeth Holmes
realized that she had no other choice. She finally had to address her
employees at Theranos, the blood-testing start-up that she had founded
as a 19-year-old Stanford dropout, which was now valued at some $9
billion. Two days earlier, a damning report published in The Wall Street Journal had alleged that the company was, in effect, a sham—that its
vaunted core technology was actually faulty and that Theranos
administered almost all of its blood tests using competitors’ equipment.

The article created tremors throughout Silicon Valley, where Holmes, the
world’s youngest self-made female billionaire, had become a near
universally praised figure. Curiosity about the veracity of the Journal
story was also bubbling throughout the company’s mustard-and-green Palo
Alto headquarters, which was nearing the end of a $6.7 million
renovation. Everyone at Theranos, from its scientists to its marketers,
wondered what to make of it all.

For two days, according to insiders, Holmes, who is now 32, had refused
to address these concerns. Instead, she remained largely holed up in a
conference room, surrounded by her inner circle. Half-empty food
containers and cups of stale coffee and green juice were strewn on the
table as she strategized with a phalanx of trusted advisers, including
Ramesh “Sunny” Balwani, then Theranos’s president and C.O.O.; Heather
King, the company’s general counsel; lawyers from Boies, Schiller &
Flexner, the intrepid law firm; and crisis-management consultants. Most
of the people in the war room had been there for two days and nights
straight, according to an insider, leaving mainly to shower or make a
feeble attempt at a couple of hours of shut-eye. There was also an
uncomfortable chill in the room. At Theranos, Holmes preferred that the
temperature be maintained in the mid-60s, which facilitated her
preferred daily uniform of a black turtleneck with a puffy black
vest—a homogeneity that she had borrowed from her idol, the late Steve
Jobs.

Holmes had learned a lot from Jobs. Like Apple, Theranos was secretive,
even internally. Just as Jobs had famously insisted at 1 Infinite Loop,
10 minutes away, that departments were generally siloed, Holmes largely
forbade her employees from communicating with one another about what
they were working on—a culture that resulted in a rare form of
executive omniscience. At Theranos, Holmes was founder, C.E.O., and
chairwoman. There wasn’t a decision—from the number of American flags
framed in the company’s hallway (they are ubiquitous) to the
compensation of each new hire—that didn’t cross her desk.

And like Jobs, crucially, Holmes also paid indefatigable attention to
her company’s story, its “narrative.” Theranos was not simply
endeavoring to make a product that sold off the shelves and lined
investors’ pockets; rather, it was attempting something far more
poignant. In interviews, Holmes reiterated that Theranos’s proprietary
technology could take a pinprick’s worth of blood, extracted from the
tip of a finger, instead of intravenously, and test for hundreds of
diseases—a remarkable innovation that was going to save millions of
lives and, in a phrase she often repeated, “change the world.” In a
technology sector populated by innumerable food-delivery apps, her
quixotic ambition was applauded. Holmes adorned the covers of Fortune,
Forbes, and Inc., among other publications. She was profiled in The New
Yorker and featured on a segment of Charlie Rose. In the process, she
amassed a net worth of around $4 billion.

Theranos blood-testing machines.

By Jim Wilson/The New York Times/Redux.

One of the only journalists who seemed unimpressed by this narrative was
John Carreyrou, a recalcitrant health-care reporter from The Wall Street Journal. Carreyrou came away from The New Yorker story surprised by
Theranos’s secrecy—such behavior was to be expected at a tech company
but not a medical operation. Moreover, he was also struck by Holmes’s
limited ability to explain how it all worked. When The New Yorker
reporter asked about Theranos’s technology, she responded, somewhat
cryptically, “a chemistry is performed so that a chemical reaction
occurs and generates a signal from the chemical interaction with the
sample, which is translated into a result, which is then reviewed by
certified laboratory personnel.”

Shortly after reading the article, Carreyrou started investigating
Theranos’s medical practices. As it turned out, there was an underside
to Theranos’s story that had not been told—one that involved
questionable lab procedures and results, among other things. Soon after
Carreyrou began his reporting, David Boies, the superstar lawyer—and
Theranos board member—who had taken on Bill Gates in the 1990s and
represented Al Gore during the 2000 Florida recount case, visited the
Journal newsroom for a five-hour meeting. Boies subsequently returned to
the Journal to meet with the paper’s editor in chief, Gerard Baker.
Eventually, on October 16, 2015, the Journal published the article: HOT
STARTUP THERANOS HAS STRUGGLED WITH ITS BLOOD-TEST TECHNOLOGY.

During the two days in the war room, according to numerous insiders,
Holmes heard various response strategies. The most cogent suggestion
advocated enlisting members of the scientific community to publicly
defend Theranos—its name an amalgam of “therapy” and “diagnosis.”
But no scientist could credibly vouch for Theranos. Under Holmes’s
direction, the secretive company had barred other scientists from
writing peer-review papers on its technology.

Absent a plan, Holmes embarked on a familiar course—she doubled down
on her narrative. She left the war room for her car—she is often
surrounded by her security detail, which sometimes numbers as many as
four men, who (for safety reasons) refer to the young C.E.O. as “Eagle
1”—and headed to the airport. (She has been known to fly alone on a
$6.5 million Gulfstream G150.) Holmes subsequently took off for Boston
to attend a luncheon for a previously scheduled appearance at the
Harvard Medical School Board of Fellows, where she would be honored as
an inductee. During the trip, Holmes fielded calls from her advisers in
the war room. She and her team decided on an interview with Jim Cramer,
the host of CNBC’s Mad Money, with whom she had a friendship that dated
from a previous interview. It was quickly arranged.

Cramer generously began the interview by asking Holmes what had
happened. Holmes, who talks slowly and deliberately, and blinks with
alarming irregularity, replied with a variation of a line from Jobs.
“This is what happens when you work to change things,” she said, her
long blond hair tousled, her smile amplified by red lipstick. “First
they think you’re crazy, then they fight you, and then, all of a sudden,
you change the world.” When Cramer asked Holmes for a terse
true-or-false answer about an accusation in the article, she replied
with a meandering 198-word retort.

By the time she returned to Palo Alto, the consensus was that it was
time, at last, for Holmes to address her hundreds of employees. A
company-wide e-mail instructed technicians in lab coats, programmers in
T-shirts and jeans, and a slew of support staff to meet in the
cafeteria. There, Holmes, with Balwani at her side, began an eloquent
speech in her typical baritone, explaining to her loyal colleagues that
they were changing the world. As she continued, Holmes grew more
impassioned. The Journal, she said, had gotten the story wrong.
Carreyrou, she insisted, with a tinge of fury, was simply picking a
fight. She handed the stage to Balwani, who echoed her sentiments.

After he wrapped up, the leaders of Theranos stood before their
employees and surveyed the room. Then a chant erupted. “Fuck you
. . .,” employees began yelling in unison, “Carreyrou.” It began
to grow louder still. “Fuck you, Carreyrou!” Soon men and women in lab
coats, and programmers in T-shirts and jeans, joined in. They were
chanting with fervor: “Fuck you, Carreyrou!,” they cried out. “Fuck
you, Carreyrou! Fuck. You. Carrey-rou!”

The Game

In Silicon Valley, every company has an origin story—a fable, often
slightly embellished, that humanizes its mission for the purpose of
winning over investors, the press, and, if it ever gets to that point,
customers, too. These origin stories can provide a unique, and uniquely
powerful, lubricant in the Valley. After all, while Silicon Valley is
responsible for some truly astounding companies, its business dealings
can also replicate one big confidence game in which entrepreneurs,
venture capitalists, and the tech media pretend to vet one another
while, in reality, functioning as cogs in a machine that is designed to
not question anything—and buoy one another all along the way.

It generally works like this: the venture capitalists (who are mostly
white men) don’t really know what they’re doing with any
certainty—it’s impossible, after all, to truly predict the next big
thing—so they bet a little bit on every company that they can with the
hope that one of them hits it big. The entrepreneurs (also mostly white
men) often work on a lot of meaningless stuff, like using code to
deliver frozen yogurt more expeditiously or apps that let you say
“Yo!” (and only “Yo!”) to your friends. The entrepreneurs generally
glorify their efforts by saying that their innovation could change the
world, which tends to appease the venture capitalists, because they can
also pretend they’re not there only to make money. And this also helps
seduce the tech press (also largely comprised of white men), which is
often ready to play a game of access in exchange for a few more page
views of their story about the company that is trying to change the
world by getting frozen yogurt to customers more expeditiously. The
financial rewards speak for themselves. Silicon Valley, which is 50
square miles, has created more wealth than any place in human history.
In the end, it isn’t in anyone’s interest to call bullshit.

When Elizabeth Holmes emerged on the tech scene, around 2003, she had a
preternaturally good story. She was a woman. She was building a company
that really aimed to change the world. And, as a then dark-haired
19-year-old first-year at Stanford University’s School of Chemical
Engineering, she already comported herself in a distinctly Jobsian
fashion. She adopted black turtlenecks, would boast of never taking a
vacation, and would come to practice veganism. She quoted Jane Austen by
heart and referred to a letter that she had written to her father when
she was nine years old insisting, “What I really want out of life is to
discover something new, something that mankind didn’t know was possible
to do.” And it was this instinct, she said, coupled with a childhood
fear of needles, that led her to come up with her revolutionary company.

Holmes had indeed mastered the Silicon Valley game. Revered venture
capitalists, such as Tim Draper and Steve Jurvetson, invested in her;
Marc Andreessen called her the next Steve Jobs. She was plastered on the
covers of magazines, featured on TV shows, and offered keynote-speaker
slots at tech conferences. (Holmes spoke at *Vanity Fair’*s 2015 New
Establishment Summit less than two weeks before Carreyrou’s first story
appeared in the Journal.) In some ways, the near-universal adoration of
Holmes reflected her extraordinary comportment. In others, however, it
reflected the Valley’s own narcissism. Finally, it seemed, there was a
female innovator who was indeed able to personify the Valley’s vision of
itself—someone who was endeavoring to make the world a better place.

The original Theranos laboratory, in Palo Alto, 2014.

By Drew Kelly.

Holmes’s real story, however, was a little more complicated. When she
first came up with the precursor to the idea of Theranos, which
eventually aimed to reap vast amounts of data from a few droplets of
blood derived from the tip of a finger, she approached several of her
professors at Stanford, according to someone who knew Holmes back then.
But most explained to the chemical-engineering major that it was
virtually impossible to do so with any real efficacy. “I told her, I
don’t think your idea is going to work,” Phyllis Gardner, a professor
of medicine at Stanford, said to me, about Holmes’s seminal pitch for
Theranos. As Gardner explained, it is impossible to get a precise result
from the tip of a finger for most of the tests that Theranos would claim
to conduct accurately. When a finger is pricked, the probe breaks up
cells, allowing debris, among other things, to escape into the
interstitial fluid. While it is feasible to test for pathogens this way,
a pinprick is too unreliable for obtaining more nuanced readings.
Furthermore, there isn’t that much reliable data that you can reap from
such a small amount of blood. But Holmes was nothing if not determined.
Rather than drop her idea, she tried to persuade Channing Robertson, her
adviser at Stanford, to back her in her quest. He did. (“It would not
be unusual for finger-stick testing to be met with skepticism,” says a
spokesman for Theranos. “Patents from that period explain Elizabeth’s
ideas and were foundational for the company’s current technologies.”)

Holmes subsequently raised $6 million in funding, the first of almost
$700 million that would follow. Money often comes with strings attached
in Silicon Valley, but even by its byzantine terms, Holmes’s were
unusual. She took the money on the condition that she would not divulge
to investors how her technology actually worked, and that she had final
say and control over every aspect of her company. This surreptitiousness
scared off some investors. When Google Ventures, which focuses more than
40 percent of its investments on medical technology, tried to perform
due diligence on Theranos to weigh an investment, Theranos never
responded. Eventually, Google Ventures sent a venture capitalist to a
Theranos Walgreens Wellness Center to take the revolutionary pinprick
blood test. As the V.C. sat in a chair and had several large vials of
blood drawn from his arm, far more than a pinprick, it became apparent
that something was amiss with Theranos’s promise.

Google Ventures wasn’t the only group with knowledge of blood testing
which felt that way. One of Holmes’s first major hires, thanks to an
introduction by Channing Robertson, was Ian Gibbons, an accomplished
British scientist who had a slew of degrees from Cambridge University
and had spent 30 years working on diagnostic and therapeutic products.
Gibbons was tall and handsome, with straight reddish-brown hair and blue
eyes. He had never owned a pair of jeans and spoke with a British accent
that was a combination of colloquial and posh. In 2005, Holmes named him
chief scientist.

Gibbons, who was diagnosed with cancer shortly after joining the
company, encountered a host of issues with the science at Theranos, but
the most glaring was simple: the results were off. This conclusion soon
led Gibbons to realize that Holmes’s invention was more of an idea than
a reality. Still, bound by the scientific method, Gibbons wanted to try
every possible direction and exhaust every option. So, for years, while
Holmes put her fund-raising talents to use—hiring hundreds of
marketers, salespeople, communications specialists, and even the
Oscar-winning filmmaker Errol Morris, who was commissioned to make short
industrial documentaries—Gibbons would wake early, walk his dogs along
a trail near his home, and then set off for the office before seven A.M.
In his downtime, he would read I, Claudius, a novel about a man who
plays dumb to unwittingly become the most powerful person on earth.

While Gibbons grew ever more desperate to come up with a solution to the
inaccuracies of the blood-testing technology, Holmes presented her
company to more investors, and even potential partners, as if it had a
working, fully realized product. Holmes adorned her headquarters and Web
site with slogans claiming, “One tiny drop changes everything,” and
“All the same tests. One tiny sample,” and went into media overdrive.
She also proved an effective crisis manager. In 2012, for instance,
Holmes began talking to the Department of Defense about using Theranos’s
technology on the battlefield in Afghanistan. But specialists at the
D.O.D. soon uncovered that the technology wasn’t entirely accurate, and
that it had not been vetted by the Food and Drug Administration. When
the department notified the F.D.A. that something was amiss, according
to The Washington Post, Holmes contacted Marine general James Mattis,
who had initiated the pilot program. He immediately e-mailed his
colleagues about moving the project forward. Mattis was later added to
the company board when he retired from the service. (Mattis says he
never tried to interfere with the F.D.A. but rather was “interested in
rapidly having the company’s technologies tested legally and
ethically.”)

At around the same time, Theranos also decided to sue Richard Fuisz, an
old friend and neighbor of Holmes’s family, alleging that he had stolen
secrets that belonged to Theranos. As the suit progressed—it was
eventually settled—Fuisz’s lawyers issued subpoenas to Theranos
executives involved with the “proprietary” aspects of the technology.
This included Ian Gibbons. But Gibbons didn’t want to testify. If he
told the court that the technology did not work, he would harm the
people he worked with; if he wasn’t honest about the technology’s
problems, however, consumers could potentially harm their health, maybe
even fatally.

The late scientist Ian Gibbons.

Holmes, meanwhile, did not seem willing to tolerate his resistance,
according to his wife, Rochelle Gibbons. Even though Gibbons had warned
that the technology wasn’t ready for the public, Holmes was preparing to
open “Theranos Wellness Centers” in dozens of Walgreens across
Arizona. “Ian felt like he would lose his job if he told the truth,”
Rochelle told me as she wept one summer morning in Palo Alto. “Ian was
a real obstacle for Elizabeth. He started to be very vocal. They kept
him around to keep him quiet.” Channing Robertson, who had brought
Gibbons to Theranos, recalls a different conversation, noting, “He
suggested to me on numerous occasions that what we had accomplished at
that time was sufficient to commercialize.”

A few months later, on May 16, 2013, Gibbons was sitting in the family
room with Rochelle, the afternoon light draping the couple, when the
telephone rang. He answered. It was one of Holmes’s assistants. When
Gibbons hung up, he was beside himself. “Elizabeth wants to meet with
me tomorrow in her office,” he told his wife in a quivering voice. “Do
you think she’s going to fire me?” Rochelle Gibbons, who had spent a
lot of time with Holmes, knew that she wanted control. “Yes,” she said
to her husband, reluctantly. She told him she thought he was going to be
fired. Later that evening, gripped and overwhelmed with worry, Ian
Gibbons tried to commit suicide. He was rushed to the hospital. A week
later, with his wife by his side, Ian Gibbons died.

When Rochelle called Holmes’s office to explain what had happened, the
secretary was devastated and offered her sincere condolences. She told
Rochelle Gibbons that she would let Holmes know immediately. But a few
hours later, rather than a condolence message from Holmes, Rochelle
instead received a phone call from someone at Theranos demanding that
she immediately return any and all confidential Theranos property.

The Enforcer

In hundreds of interviews with the media and on panels, Holmes honed her
story to near perfection. She talked about how she didn’t play with
Barbies as a child, and how her father, Christian Holmes IV, who worked
in environmental technology for Enron before going on to work in a
number of senior government jobs in Washington, was one of her idols.
But her reverence for Steve Jobs was perhaps most glaring. Besides the
turtlenecks, Holmes’s proprietary blood-analysis device, which she named
“Edison” after Thomas Edison, resembled Jobs’s NeXT computer. She
designed her Theranos office with Le Corbusier black leather chairs, a
Jobs favorite. She also adhered to a strange diet of only green juices
(cucumber, parsley, kale, spinach, romaine lettuce, and celery), to be
drunk only at specific times of the day. Like Jobs, too, her company was
her life. She rarely ever left the office, only going home to sleep. To
celebrate her birthday, Holmes held a party at Theranos headquarters
with her employees. (Her brother, Christian, also works at Theranos.)

But the most staggering characteristic that she borrowed from the late
C.E.O. was his obsession with secrecy. And while Jobs had a fearsome
security force who ensured that confidential information rarely, if
ever, left Apple’s headquarters, Holmes had a single enforcer: Sunny
Balwani, the company’s president and chief operating officer, until he
stepped down in May. Balwani, who had previously worked at Lotus and
Microsoft, had no experience in medicine. He was hired in 2009 to focus
on e-commerce. Nevertheless, he was soon put in charge of the company’s
most secret medical technology.

According to a number of people with knowledge of the situation, the two
had met years before he began at the company, when Holmes took a trip to
China after she graduated from high school. The two eventually started
dating, numerous people told me, and remained very loyal even after
their relationship ended. Among Holmes’s security detail, Balwani was
known as “Eagle 2.”

When employees questioned the accuracy of the company’s blood-testing
technology, it was Balwani who would chastise them in e-mails (or in
person), sternly telling staffers, “This must stop,” as The Wall
Street Journal reported. He ensured that scientists and engineers at
Theranos did not talk to one another about their work. Applicants who
came for job interviews were told that they wouldn’t know what the
actual job was unless they were hired. Employees who spoke publicly
about the company were met with legal threats. On LinkedIn, one former
employee noted next to his job description, “I worked here, but every
time I say what I did I get a letter from a lawyer. I probably will get
a letter from a lawyer for writing this.” If people visited any of
Theranos’s offices and refused to sign the company’s lengthy
non-disclosure agreement, they were not allowed inside.

Balwani’s lack of medical experience might have seemed unusual at such a
company. But few at Theranos were in a position to point fingers. As
Holmes started to assemble her board of directors, she chose a dozen
older white men, almost none of whom had a background in anything
related to health care. This included former secretary of state Henry
Kissinger, former secretary of state George Shultz, former Georgia
senator and chairman of the Armed Services Committee Sam Nunn, and
William J. Perry, the former defense secretary. (Bill Frist, the former
Senate majority leader, and former cardiovascular doctor, was an
exception.) “This was a board that was better suited to decide if
America should invade Iraq than vet a blood-testing company,” one
person said to me. Gibbons told his wife that Holmes commanded their
attention masterfully.

Theranos’s board may not have been equipped to ask what exactly the
company was building, or how, but others were. While Holmes was bounding
around the world on a private plane, speaking on panels with Bill
Clinton, and giving passionate TED talks, two government organizations
started quietly inspecting the company. On August 25, 2015, months
before the Journal story broke, three investigators from the F.D.A.
arrived, unannounced, at Theranos’s headquarters, on Page Mill Road,
with two more investigators sent to the company’s blood-testing lab in
Newark, California, demanding to inspect the facilities.

According to someone close to the company, Holmes was sent into a panic,
calling advisers to try to resolve the issue. At around the same time,
regulators from the Centers for Medicare and Medicaid Services, which
regulates laboratories, visited the labs and found major inaccuracies in
the testing being done on patients. (The Newark lab was run by an
employee who was criticized for insufficient laboratory experience.)
C.M.S. also soon discovered that some of the tests Theranos was
performing were so inaccurate that they could leave patients at risk of
internal bleeding, or of stroke among those prone to blood clots. The
agency found that Theranos appeared to ignore erratic results from its
own quality-control checks during a six-month period last year and
supplied 81 patients with questionable test results.

While the government was scouring through Theranos’s inaccurate files
and data, Carreyrou was approaching the story not as a fawning tech
blogger, but rather as a diligent investigative reporter. Carreyrou, who
had worked at the Journal since 1999, had covered topics ranging from
terrorism to European politics and financial misdeeds before returning
to the New York newsroom and taking over the health-and-sciences bureau.
As a reporter of obscure and often faceless subjects, he was not enticed
by access, nor was he afraid of lawyers. In fact, he had won two
Pulitzer Prizes for taking on nemeses as significant as Vivendi and the
U.S. government. After a team of seasoned lawyers arrived at the Journal
newsroom, Carreyrou was simply emboldened. “It’s O.K. if you’ve got a
smartphone app or a social network, and you go live with it before it’s
ready; people aren’t going to die,” he told me. “But with medicine,
it’s different.”

Meanwhile, Theranos had its lawyers send a letter to Rochelle Gibbons’s
attorney, threatening legal action for talking to a reporter. “It has
been the Company’s desire not to pursue legal action against
Mrs. Gibbons,” a lawyer for Boies, Schiller & Flexner wrote. “Unless
she immediately ceases these actions, she will leave the Company no
other option but to pursue litigation to definitively put an end
[to] these actions once and for all.” Others who spoke to the
Journal were met with similar threats.

By Carlos Chavarría/The New York Times/Redux.

The End

Back in March 2009, Holmes returned to the Stanford campus, where her
story had begun, to talk to a group of students at the Stanford
Technology Ventures Program. Her hair wasn’t yet bleached blond, but she
had started to wear her uniform of a black turtleneck, and she was just
beginning to morph into the idol she would soon become in Silicon
Valley. For 57 minutes, Holmes paced in front of a chalkboard and
answered questions about her vision. “It became clear to me,” she said
with conviction, “that if I needed to, I’d re-start this company as
much as possible to make this thing happen.”

This is exactly what Holmes seems to be doing now. Executives from
Theranos, including Holmes and Balwani, declined to sit for interviews.
But on a recent July afternoon, I traveled to the company’s headquarters
anyway. From the outside, Theranos seems to be in a sad state. The
parking lot was devoid of cars, with more than half the spaces empty (or
half full, depending on your outlook). The giant American flag that
hangs in front of the building was flaccid at half-staff. On the edge of
the parking lot, a couple of employees were smoking cigarettes as a
single security guard stood nearby, taking a selfie.

On the Friday morning that they gathered in the war room, Holmes and her
team of advisers had believed that there would be one negative story
from the Journal, and that Holmes would be able to squash the
controversy. Then it would be back to business as usual, telling her
flawlessly curated story to investors, to the media, and now to patients
who used her technology.

Holmes and her advisers couldn’t have been more wrong. Carreyrou
subsequently wrote more than two dozen articles about the problems at
Theranos. Walgreens severed its relationship with Holmes, shuttering all
of its Wellness Centers. The F.D.A. banned the company from using its
Edison device. In July, the Centers for Medicare and Medicaid Services
banned Holmes from owning or running a medical laboratory for two years.
(This decision is currently under appeal.) Then came the civil and
criminal investigations by the U.S. Securities and Exchange Commission
and the U.S. Attorney’s Office for the Northern District of California
and two class-action fraud lawsuits. Theranos’s board has subsequently
been cleaved in two, with Kissinger, Shultz, and Frist now merely
“Counselors.” Holmes, meanwhile, isn’t going anywhere. As the C.E.O.
and chairwoman of Theranos, only she can elect to replace herself.

Forbes, clearly embarrassed by its cover story, removed Holmes from its
list of “America’s Richest Self-Made Women.” A year earlier, it had
estimated her wealth at $4.5 billion. “Today, Forbes is lowering our
estimate of her net worth to nothing,” the editors wrote. Fortune had
its mea culpa, with the author stating boldly that “Theranos misled
me.” Director Adam McKay, fresh off his Oscar for The Big Short, has
even signed on to make a movie based on Holmes, tentatively titled Bad
Blood. (On the bright side for Holmes, Jennifer Lawrence is attached as
the lead.)

Silicon Valley, once so taken by Holmes, has turned its back, too.
Countless investors have been quick to point out that they did not
invest in the company—that much of its money came from the relatively
somnolent worlds of mutual funds, which often accrue the savings of
pensioners and retirees; private equity; and smaller venture-capital
operations on the East Coast. In the end, one of the only Valley V.C.
shops that actually invested in Theranos was Draper Fisher Jurvetson.
Many may have liked what Holmes represented about their industry, but
they didn’t seem to trust her with their money.

Meanwhile, Holmes has somehow compartmentalized it all. In August, she
flew to Philadelphia to speak at the American Association for Clinical
Chemistry’s annual conference. Before she stepped out onstage, the
conference organizers played the song “Sympathy for the Devil” for the
ballroom, packed with more than 2,500 doctors and scientists. Holmes was
wearing a blue button-up shirt and black blazer (she has recently
abandoned the black turtleneck), and she spoke for an hour while rapidly
flicking through her presentation. The audience was hoping that Holmes
would answer questions about her Edison technology and explain whether
or not she knew it was a sham. But instead Holmes showed off a new
blood-testing technology that a lot of people in the room insisted was
not new or groundbreaking. Later that day she was featured on Sanjay
Gupta’s CNN show and a few weeks later appeared in San Francisco at a
splashy dinner celebrating women in technology. “Elizabeth Holmes won’t
stop,” Phyllis Gardner, the Stanford professor, told me. “She’s
holding on to her story like a barnacle on the side of a ship.”

Holmes may not be prepared to compartmentalize what comes next. When I
arrived in Palo Alto in July, I wasn’t the only person setting out to
interview anyone associated with Theranos and Holmes. The Federal Bureau
of Investigation was, too. When I knocked on a door, I was only a day or
two behind F.B.I. agents who were trying to put together a time line of
what Holmes knew and when she knew it—adding the most unpredictable
twist to a story she could no longer control.